High fuel hike?

Tue, 08 Jul 2008

A 20 to 40 cent increase in the petrol price is possible during August, said T-sec economist Mike Schussler on Monday.

"The oil market is very volatile at the moment," said Schussler. "It's not a simple situation."

For the current month there was a 54 cent under-recovery overall for petrol and 60 cent under-recovery for diesel.

An increase of between 20 to 40 cents was then likely for next month, said Schussler.

He said the most worrying time for South African fuel prices would be in the fourth quarter of the year. At that time the northern hemisphere would be experiencing winter.

Since this hemisphere bought 80 percent of the energy world wide, they would be buying a lot of the oil for heating.

He said South Africans could be paying well over R12 for diesel and well over R11 or even R12 for petrol by that time.

"The chances are that we are going to have a 50c to R1 increase for petrol and diesel by the end of the year," he said.

"It will be the most trying time for the economy."

Schussler said there should be some relief next year when oil from new oil fields began reaching the market.

He said the chances for an economic recession in South Africa were increasing.

"We already seeing a slowdown in economic growth. It's very difficult to say exactly...where the South African economy is going to go."